Smart buying

Purchasing maintenance equipment is an important decision for golf course superintendents. It’s done differently at each course. Some equipment is bought,  and some is leased. Some is bought used, and some is bought new. Although superintendents handle purchasing differently, they have processes and recommendations other superintendents might find helpful.

How it’s done
Ken Flisek, golf course superintendent at The Club at Nevillewood in Presto, Pa., doesn’t work with a general manager – he works with a finance committee and board of directors.

“I run purchasing decisions through the committee, and then the board makes recommendations,” he says.

Flisek keeps a detailed equipment inventory with sections for greens mowers, fairway mowers, rough mowers, utility vehicles and sprayers. There’s a total for each category, a record of the purchase date for each, a projected replacement date for each and a date when each item will be paid off and if it was bought with a loan.

John Feiner, superintendent at Johnson Park Golf Course, and his business partner don't buy much equipment, and when they do, it's often used.

Flisek also puts the date a machine was purchased on it to help remind him how old the piece is and when it’s projected to be replaced.

“Then I can always see what I need to replace first,” he says. “Sometimes it helps if members see how old the equipment is, and they can see what needs to be replaced.”

Flisek, who has almost $1 million of equipment inventory, likes to buy large equipment packages every three or four years because he says bigger packages equal bigger discounts and better prices.

“We are switching from five-gang mowers to triplex mowers,” he says. “We had four five-gang mowers, now were down to two, and soon we won’t have any.”

Flisek also shares some equipment, such as aerifiers and tractors, with other golf courses nearby to save money.

Kevin Ross, certified golf course superintendent at the Country Club of the Rockies, says superintendents should demo equipment for at least a few days before purchasing anything.

“I’ll buy one machine, and he’ll buy one machine, and we’ll share the equipment and schedule aerification so we’re not doing it at the same time,” he says. “My club loves sharing equipment because they see the savings. More superintendents can take advantage of it, but it takes a bit of work and planning.”

Some maintenance at The Club at Nevillewood is contracted out (costing about $5,000) because Flisek doesn’t want to spend $20,000 on a machine he uses once a year.

“Aerifying fairways is something we do once a year and have contracted out because the contractor has three or four machines and can do it in two days, whereas it would take us a week.”

At the daily-fee Johnson Park Golf Course in Racine, Wis., John Feiner, golf course superintendent, and his business partner don’t buy that much equipment and maintain the equipment they have. When they buy equipment, many times it’s used.

The last pieces of equipment Feiner bought were two used Ransom fairway mowers and two used Jacobsen triplex greens mowers. He used to purchase more prototypes directly from Jacobsen when the company was in town.
Feiner says he has no budget for purchasing new equipment partly because the course is leased from the city of Racine.

Some maintenance at The Club of Nevillewood in Presto, Pa., is contracted out because its superintendent doesn't want to spend $20,000 on a machine he uses once a year.

Jason Amoy, golf course superintendent at the 18-hole Mid-Pacific Country Club in Kailua, Oahu in Hawaii, says his purchasing process and decision making are easy and typical.

“My responsibility is to determine our maintenance needs and submit a budget,” Amoy says. “We try to forecast five years out, and we go year by year and submit a budget prior to the next fiscal year, which is from July though June. Numbers are looked at, and money is assured.”

Kevin Ross, certified golf course superintendent at The Country Club of the Rockies in Vail, Colo., is the sole decision maker when it comes to purchasing equipment. Ross goes through the equipment to see what he needs to replace and to see if there is anything new on the market he would like to buy. He submits a list to the board of directors, and they give approval. And he doesn’t lease anything.

When buying used equipment, one of the things to look at is the engine to see how many hours it has been used.

“We pay cash for everything,” he says. “We don’t take out bank loans. We recently completed a $3.5 million clubhouse renovations and paid cash for it. It’s a good deal for me. Every piece of equipment I’ve asked for in the past 10 years, I’ve gotten.

“I’m not married to any color or salesman,” he adds. “But when buying equipment, a superintendent should ask for a demo for longer than an hour. You need it for three days to a week if you can.”

 Club members mostly are retired chief executive officers of Fortune 500 companies and is the reason Ross pays cash for equipment.

The club also has a $30,000 contingency fund, but Ross says the most that was ever spent out of that was $16,000.

Timing
Choosing the right time to purchase equipment also is a key to smart buying. Most of the equipment Flisek purchases is done so through a four-year bank loan or a four-year lease with a dollar buyout at the end of the term. He makes smaller purchases of about $50,000 in between the larger $200,000 to $250,000 purchases every four years.

“We purchase most equipment, but some stuff is leased,” he says. “Anything that lasts more than five years, we buy. All utility vehicles are leased through a distributor. We have a four-year lease on those. Of the 10, five are new, and five are used. A few of the used are old golf carts that were converted by the manufacturer into people movers with small flatbeds. A new one costs $6,000, and the three-year-old cart is less than $2,000.”

In 2000, Flisek bought $250,000 of equipment on a five-year loan from a bank. It will be paid off this year. In the fourth quarter of last year, he planned for what he will purchase this year and next – fairway mowers and walking greens mowers.

“The walking greens mowers we use on the greens for five years, then they are used on the tees for another five years after that, so we get 10 years out them,” he says. “Fairway mowers usually last six to eight years. After six years, you’re putting so much money into maintaining them that you’re better off buying a new ones.”

Ross says that after six years he will trade-in his fairway mowers, which cost $35,000 to $40,000 a piece. Compare that to the cost of a tractor that he pays $28,000 for and lasts 20 years. Ross bought a rough mower two years ago for $48,000, and the one before that lasted nine years.

Ross has 24 walk-behind mowers – 12 for the tees and approaches and 12 for the greens. He’s had some for four or five years and others for eight or nine years.

“They still look like new because our mechanic does a super job,” he says.
The last time Feiner bought new equipment was about six years ago when he purchased two greens mowers and a utility vehicle. He also bought a new sprayer about 10 years ago. He’s still using that equipment. He doesn’t have any specific timing schedule for purchasing.

When Amoy decides to purchase equipment, he goes through two or three vendors. In the third quarter last year, Amoy purchased some rough, greens and tee-box mowers, and a couple utility vehicles. He says this equipment should last seven to nine years. The new equipment replaced 15-year-old equipment.

Amoy says he can purchase equipment at any time during the year when he needs to.

“You always want more than you can afford, but there is a paring down process of evaluating needs and figuring our what we can wait another year for,” he says.

“It all depends on the local vendor. Service is everything nowadays.”

Purchasing steps
If a course is new, that can affect the purchasing decision. The public, 18-hole Boulder Point Golf Course in Elko, Minn., opened in 2002 and was a new construction project. Brad Zimmerman, the course’s golf course superintendent, looked at three packages from three major distributors, all of which had comparable equipment. But Zimmerman wanted to buy from the vendor that was going to give him the best service after the equipment was purchased. He also decided to buy from one vendor because of the price he got for buying many pieces of equipment from one vendor. Zimmerman took his decision to the ownership, and they agreed. They discussed what was needed, what wasn’t needed and what they didn’t need immediately.

Purchasing versus leasing: What to do?

Many golf course superintendents have the option of leasing or buying equipment. Leasing allows superintendents who don’t have the cash to buy equipment use it. Many times superintendents make this decision blindly, according to Cleve Cleveland, certified golf course superintendent at Newark Valley (N.Y.) Golf Club. “Leasing companies are into leasing equipment to make money,” Cleveland says. “In the long run, its not the cheapest way to get equipment. It may be good for the short term or if you’re only going to use the piece of equipment a few times a year. You lease equipment to use it, not to own it.” Cleveland says there are terms superintendents should know. A residual is the buyout price at the end of the lease. The superintendent pays the difference between what the lessor buys the equipment for and what they’re going to sell it for at the end of the lease. An open-end lease is when the lessor determines the worth of the item at the end of the lease. A capital lease is having the option to buy the equipment at less than fair market value, and there is no transfer of title. “It doesn’t pay to keep leased equipment well maintained,” he says. The decision comes down to which costs more money. “A lease is only relevant when purchasing equipment is an option,” Cleveland says. Reasons to buy equipment includes having the cash and no impending alternative use for it, purchasing incentives from the manufacturer, and intending to keep equipment for five years. Reasons to lease include not having cash, being in a new construction situation; replacing it in five years, lease incentives, and other impending uses of cash. GCN Cleveland says one thing to always remember is that a lease is negotiable. GCN.

To start, Zimmerman purchased four triplex mowers, two fairway mowers, two rotary rough mowers, two walk-behind mowers, one sprayer, two utility vehicles, one bunker rake, two aerifiers and one tractor. The equipment was delivered about a month before the course opened. A skid loader and a small walk-behind blower were purchased later.

“I’m sitting in really good shape,” Zimmerman says. “I don’t need more equipment right now.”
Zimmerman says he did consider leasing the equipment, but says he was better off  buying it because the equipment will last a long time and he can change parts when needed. After four years (in 2006), the course will own the equipment.
“We are in a constant state of evaluating the equipment and are doing preventive maintenance on it,” he says.

Zimmerman, who is in his first superintendents job where he is making decisions about equipment purchases, says leasing is an option in 2006 because he never rules anything out if it’s a good business decision.
He says it was also important that the vendors he bought from loaned him used equipment to use during the grow-in phase so he didn’t have to use the new equipment he purchased because grown-in is hard on equipment. The equipment used on grow-in was free of charge.

“That was a huge benefit to us,” he says.

When Feiner purchases used equipment, the main thing he looks at is the engine to see how many hours it has. He says when an engine has about 2,000 to 2,500 hours, it starts going down hill, and he won’t purchase a piece of equipment if it has that many hours on it.

He says with the number of equipment leased and the amount of equipment turnover, there’s a decent amount of used equipment for sale.

Amoy says things are different in Hawaii because there are no leasing programs and there’s a limited number of inventory.

“I would like to lease equipment next time I need new equipment, specifically mowers and utility vehicles,” he says.

Recommendations
Feiner recommends other superintendents look for good used equipment because it can save them money.

Some specialty equipment, such as deep-tine aerators, is contracted out instead of purchased by clubs.

“You can end up with two good pieces of equipment instead of one,” he says. “There is a glut of good used equipment out there. But I see more new stuff going around to other golf courses. Country clubs have larger budgets than we do. We’re a municipal course with fairly cheap greens fees so we have to watch our money.”

He says good equipment also can be purchased at an auction.

Feiner also recommends superintendents don’t purchase prototype equipment because replacement parts are difficult to find, even though it runs well at first.
“I bought a prototype one time, and parts became a problem,” he says. “I would stay away from them.”

Zimmerman advocates support after the sale.

“You need to know a vendor well and how you will be supported for the life of the piece of equipment,” he says. “The vendor’s support is just as important as the capability of the equipment.” GCN

John Walsh is the editor of Golf Course News. He can be reached at jwalsh@gie.net.

Equipment purchasing tips for golf course superintendents

What to do • Demo each piece of equipment you buy – it’s critical. • Wheel and deal at the Golf Industry Show. • Realize it’s hard to save money from the big three (Toro, Jacobsen and John Deere). • Buying used equipment is a good idea for clubs that are in a budget crunch. • Purchase equipment not used often with other local clubs to save money. • Plan ahead. • Make large purchases to get better prices. • Be organized – have detailed inventory to show the board of directors. • Discuss purchases with the guys running the equipment. • Get feedback from the mechanic because he knows what’s most reliable and what needs less maintenance. • Ask for videotapes that help/instruct operators.  What not to do • Don’t tie yourself to one vendor because there’s going to be some pieces you get that you won’t like. Get the best machine for your needs and consider which vendor will give you the best service. If you work with all the vendors, someone always does a good job to increase their share of equipment with you. If you have just one distributor they tend to take you for granted. • The lowest bid isn’t the way to go, but if it comes down to money, it’s understandable. • Try not to buy too many machines in the first year of production because it usually takes one year to get the bugs out. Source: Golf Course News research